In 2025, Indian students reassess study-abroad dreams amid rising costs due to a weaker rupee and skyrocketing tuition fees. The dream of studying abroad has been challenged by the growing financial burden on students and their families. With increasing education costs, the focus for many students has shifted from simply choosing the best study destination to finding ways to fund their education effectively while ensuring a solid return on investment (ROI). This new financial awareness is prompting a reconsideration of study-abroad plans.
Rising Financial Awareness Among Indian Students
The pressure of affording overseas education has led to a rise in the number of students seeking educational loans. Education consultants and loan providers have reported a surge in inquiries, reflecting a growing awareness of the financial challenges involved.
| Year | Loan Disbursements (Rs. Crores) | Average Loan Size (Rs. Lakhs) |
|---|---|---|
| FY22 | 1,551.25 | 28.8 |
| FY24 | 4,712.80 | 33.1 |
Amit Gainda, CEO of Avans Financial Services, noted that the disbursement of study-abroad loans has tripled, highlighting the increasing financial commitment required to pursue education abroad.
How the Weak Rupee Affects Indian Students
The depreciation of the Indian rupee has further exacerbated the financial strain for students aspiring to study in countries like the U.S., Canada, and the UK. Tuition fees in top destinations can range from $30,000 to $80,000 annually. These rising costs, combined with inflation and exchange rate volatility, have forced students and their families to rethink their study-abroad plans carefully.
Loan Dependency: A Growing Trend Among Indian Students
A significant portion of Indian students pursuing education abroad relies heavily on loans. According to Adarsh Khandelwal, co-founder of Collegify, around 70-80% of Indian students in the U.S. fund their education through loans, with amounts typically ranging from $50,000 to $100,000.
These loans often come with extended repayment periods of 7 to 10 years, making it crucial for students to assess the potential ROI of their degrees.
Avoiding the “Prestige Trap” in Study Choices
Students are increasingly advised to stay clear of what’s known as the “prestige trap.” While many opt for prestigious universities, they often fail to evaluate the employment prospects and salaries that their chosen field of study will generate.
Adarsh Khandelwal pointed out that degrees in fields like political science, history, and liberal arts often don’t lead directly to high-paying jobs. Graduates from these fields frequently struggle to secure employment, making the financial burden of their education hard to recover.
Financial Institutions Respond to the Rising Loan Demand
Despite the surge in loans for overseas education, financial institutions such as Prodigy Finance are working to minimize risks. According to Sonal Kapoor, Chief Commercial Officer at Prodigy Finance, they focus on providing support to students pursuing high-demand fields, which helps reduce the risk of defaults.
Furthermore, educational loan providers like Avanse Financial Services (AFS) have implemented advanced technology to predict loan defaults and improve collection strategies. Their strategic partnerships with reputable institutions and their risk classification system ensure that the loans provided align with the potential return on investment for students.
A Shift Toward Affordable, Employability-Focused Universities
Nikhil Jain, founder of Foreign Admits, highlighted a notable shift in student preferences. “Students are becoming more financially aware and are focusing on employability and affordability over rankings,” he explained. Many students are now opting for lower-ranked but more affordable universities that offer better job placement opportunities, located in prime areas with lower tuition fees.
Students are increasingly evaluating universities not just based on their rankings but by examining ROI, employment rates, and the salaries graduates can expect in their chosen fields. This trend signifies a more calculated approach to education choices, fueled by the desire for sustainable careers and financial stability post-graduation.
A New Era of Study Abroad Decisions for Indian Students
In 2025, Indian students reassess study-abroad dreams amid rising costs as they face greater financial challenges. While the dream of studying abroad remains intact, students and their families are becoming more discerning in their choices. With a growing focus on ROI, employability, and affordable education, Indian students are making more informed decisions than ever before. This shift highlights the evolving landscape of study-abroad planning in New Delhi and beyond.
FAQ: Key Questions About Indian Students’ Study-Abroad Plans Amid Rising Costs
Q1: How have rising costs impacted Indian students studying abroad in 2025?
A1: Rising tuition fees, coupled with a weak rupee, have made it more difficult for Indian students to afford overseas education. This has led to a surge in educational loan applications and a shift in preferences toward more affordable institutions with strong employment outcomes.
Q2: What is the average loan amount Indian students are taking for studying abroad?
A2: The average loan amount for Indian students studying abroad has risen to Rs. 33.1 lakhs in FY24, up from Rs. 28.8 lakhs in FY22.
Q3: How are students adjusting their study choices amid rising costs?
A3: Many students are opting for universities with lower tuition fees but strong employability outcomes. They are also evaluating the ROI of their chosen courses and avoiding degrees that do not offer direct employment opportunities.
Q4: Why are students advised to avoid the ‘prestige trap’?
A4: Students are advised to avoid the “prestige trap” because prestigious universities may not always offer programs that lead to high-paying jobs. Graduates from certain fields, such as liberal arts or political science, often face challenges in securing employment that justifies their high educational costs.
Q5: How can students ensure they are making financially sound decisions for studying abroad?
A5: Students can ensure they are making sound financial decisions by researching employment rates, salaries in their field of study, and the financial support options available, including loans and scholarships.
